The beginning of 2016 is here and some families are welcoming twins into the world. Nevertheless, what if they are in that small minority whose children were technically born in two different years? This is what the hospital will put on the birth certificate. So how does that influence your tax benefit calculations?
The Tax Exemption System
You can claim a tax exemption on your new children. Both twins would qualify for tax exemptions, but because they were born in different years, the twin born in 2016 doesn’t qualify for 2015.
Are there any special rules?
The situation is so rare that there are no special rules to take into account. Unfortunately, a family in this scenario has no choice but to go without a separate tax credit for the year 2015. It’s a tough break, but those are the rules.
What Can You Do?
Unfortunately, there’s nothing you can do. In the eyes of Uncle Sam, it’s a big deal that the two children were born in separate years.
This is not just a problem for that first year. It becomes an issue later when claiming other tax benefits. It will mean the child born in 2016 will always be one tax exemption behind the child born in 2015 because of the way their birthdays fall.
It’s just another quirk in the tax system that leaves families defenseless. The best thing you can do is opt for strict and accurate financial planning.
Image credit: Donnie Ray Jones